Health Management Associates plead guilty to false billing as well as other violations of the False Claims Act as a result of a whistleblower action that was commenced looking into its billing practices. The hospital chain that has facilities throughout the United States was pressuring physicians into admitting patients to their hospitals, even when outpatient services would have been adequate to provide treatment to the patient. Physicians were incentivized for complying with the requests made by the management staff at HMA. After a full investigation, which started in 2013, the hospital chain agreed to pay a settlement fee of more than $260 million.

Whistleblower Case Against Health Management Associates

On the 25th of September 2018, the U.S. Department of Justice issued a press release stating that Health Management Associates was found guilty and agreed to pay a settlement fee that reached over $260 million in total.

The settlement was agreed by the major hospital chain after a whistleblower case was filed against them by two former employees. The whistleblower case accused HMA of defrauding the government by false billing. False billing allegations are core to actions under the False Claims Act and inherently involve allegations of Medicare Fraud and/or Medicaid Fraud.

The investigation found that the company had enforced rules that awarded physicians for admitting patients who came to the emergency room when an outpatient treatment would have been sufficient. Physicians did explain that they were forced into these actions by the management of HMA. This type of practice is comparable to upcoding, since billing for the in patient treatment generated significantly greater amounts of revenue for the hospitals and a burden to the taxpayers.

According to whistleblower attorney Jason T. Brown, “This is an excellent qui tam settlement as a case this extensive its challenging to show the individualized course of treatment did not warrant hospitalization especially when Doctors should err on the side of caution when patient health is at issue.  However, when a medical institution makes it a pattern and practice to admit patients upon self-reporting of issues that ostensibly don’t require hospitalization it does a disservice to everyone including the patient and the taxpayer who foots the bill for Medicare Fraud.  Great work by the government, the law firms involved, and to the courage of the whistleblowers who blew the whistle on this unlawful practice.”

Not only will the two employees who came forward be showered with praise for doing the right thing, but under the settlement mechanism of the False Claims Act, they will receive a whistleblower award of approximately $27 million dollars, no small sum for doing the right thing.  While the FCA calls for awards up to 30% of the sums recovered, it is based on the sums recovered based on the information provided by the whistleblower, also known as the relator, so it’s critical to articulate the case in a prompt and correct manner.

In addition to admitting patients to the hospital when admission was not necessary in terms of their medical condition, the investigation also discovered that the chain of hospitals overbilled government health care agencies for services that were provided to the patients during their admission.

Governmental health care agencies affected included Medicare and Medicaid, both of which are federally funded.

Conclusion

This is only one example of the many cases related to fraud in the healthcare industry, brought forward by whistleblowers. Employees who blow the whistle and report such fraud play an important part in reducing health care fraud and damage done to the United States governmental health plans, including Medicaid and Medicare. If you have noticed such misconduct in the workplace, it is important to contact an experienced whistleblower attorney, such as former FBI Special Agent Jason T. Brown at Brown, LLC, who can investigate your case and determine if it is worth filing. You may be eligible for a reward of up to 30% the amount claimed in a settlement, should your case be successful.

$260+ Million Settlement False Claims Act (FCA) False Billing Whistleblower Case